7-8 Mode 5- Exchange, 2* PriorityOn July 1, 2017, Banded Water Company traded in an old machine with a carrying amount of P10,000 for a similar newmachine having a cash price of P32,000, and paid a cash difference of P19,000.7) How much should the property be initially recognized?A 32.000B. 29,000C. 51,000D. 13,0008) How much is the gain or loss from the trade in transactions?A 22,000B. 10,000C. 3,000D. Zero

When an old asset is exchanged for new asset , the value of the new asset is recognized at its…

Answered: of P32.000, and paid a cash dif perty…

Business

Accounting

of P32.000, and paid a cash dif perty be initially recognized?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

Question

7-8

Mode 5- Exchange, 2* Priority
On July 1, 2017, Banded Water Company traded in an old machine with a carrying amount of P10,000 for a similar new
machine having a cash price of P32,000, and paid a cash difference of P19,000.
7) How much should the property be initially recognized?
A 32.000
B. 29,000
C. 51,000
D. 13,000
8) How much is the gain or loss from the trade in transactions?
A 22,000
B. 10,000
C. 3,000
D. Zero

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